Project Management Improving Performance with KPIs Shelia Darby, MBA, PMP Darby Consulting

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1 Project Management Improving Performance with KPIs Shelia Darby, MBA, PMP Darby Consulting Welcome to the PMI Houston Conference & Expo and Annual Job Fair 2015 Please put your phone on silent mode Q&A will be taken at the close of this presentation There will be time at the end of this presentation for you to take a few moments to complete the session survey. We value your feedback which allows us to improve this annual event.

2 Project Management Improving Performance with KPIs Shelia Darby June 2015

3 About Shelia Darby Shelia leads the PMO Consulting & Project Support Practice for Darby Consulting. 16 years of major capital project experience MBA from Rice University BBA from Baylor University Certified PMP 3

4 Project Organizations are Re-thinking Metrics and Performance

5 Measuring to Improve Performance Common Language for KPIs

6 KEY RESULT INDICATORS (KRIs) measure the results of your projects Example: % of projects delivered on-time, on-budget & within scope 6

7 KRIs KEY RESULT INDICATORS (KRIs) Both financial and non-financial Frequency is weekly, monthly and quarterly Report progress to senior management (and the Board) Not helpful to project teams as corrective actions are neither identified nor understood Responsibility lies with senior management and CEO 15

8 KEY PERFORMANCE INDICATORS (KPIs) measure the actions of project teams that lead to results Example: % of design peer reviews completed; % of contract reviews scheduled

9 KPIs KEY PERFORMANCE INDICATORS (KPIs) Nonfinancial measures Frequency is daily, weekly and monthly Acted on by the Project Management, VP of PMO, and/or senior management Actionable by project teams as responsive actions have been identified and understood Responsibility can be tied to project teams or individuals 17

10 Why ~70% of Measurement Initiatives Fail Time and effort required Consequences of measurement Perceived lack of benefit of measurement Difficulties with data access and IT systems Continued top management commitment Too many measures Wrong measures 20

11 Performance Measurement Framework Critical Success Factors KPI Objectives KPI Metrics Action Outcome Critical success factors (CSFs) are derived from what leaders care most about their projects KPI objectives are derived from what leaders need to know about their projects KPI metrics are identified to determine whether CSFs are being met Data visualization tools enable leaders to quickly take action Problem areas are proactively managed; project performance is improved; better decisions are made PROJECT MANAGEMENT CHANGE MANAGEMENT DATA MANAGEMENT 21

12 Best Practice #3 Translate CSFs to Objectives FINANCIAL Report ROI, NPV, IRR and payback period of each project Report net operating margins Utilization of assets PROCESS Maintain timing of approval sign-offs Maintain scope change control processes Maintain timely production of management reports EXECUTION Minimize schedule, budget, quality & scope variances Minimize safety and environmental incidents Reduce time to respond to project issues CUSTOMER Keep promises made to customers, employees & stakeholders Protect company image and reputation Improve customer satisfaction ratings 24

13 Best Practice #4 Translate objectives to metrics F FINANCIAL Are project outcomes delivering on business expectations? 25

14 Best Practice #8 Sketch requirements in low fidelity Pipeline Construction Portfolio overall healt h 82% $ per inch mile South East Region $1.6m 67% $1.6 $2.1 % milest ones complet e 72% 94% 98% 92% 82% 62% 64% 82% Cost Schedule Safety Resources Risks Issues Qualit y $1.2 p10 p50 p90 % project s on schedule 34% Delayed On-Schedule Planning Engineering Construction % resource ut ilizat ion 82% Avg. %ROW Cost 16% Avg. Pi pe Spread per Day 750m Avg. %Welding Hrs. 36% $ Welding Cost per Inch-M ile $102 Permit Delays by Type 42 29

15 Best Practice #9 Mockup to accelerate development DASHBOARDS PIPELINE CONSTRUCTION DASHBOARD southeast portfolio Project health 26% As of July 1, 2015 $ per inch mile $1.7m P-50 $2.1M % milestones complete 48% total average $1.7M COST 72% SCHEDULE 94% SAFETY 98% RESOURCES 92% RISKS 82% ISSUES 62% QUALITY 64% average pipe spread 752 meters der day $1.2M % resource utilization 67% total average permit delays 42 by type PLAN ENG. CONST. % projects behind schedule 52% total average welding cost $14m per inch mile 30

16 Change Management KPI Management System 35

17 Shared Purpose Start with conducting an assessment Provide an assessment to justify investment in measurement improvement initiatives. Gain alignment on opportunities to improve project performance measurement. Identify quick wins to gain momentum, demonstrate early success and achieve buy-in from stakeholders. Develop a roadmap for achieving performance improvement maturity.

18 Getting started Measures tie to CSFs Stakeholder involvement & understanding Well balanced to achieve objectives Actions Identified & Taken Identification & Selection Reporting & Visualization Collection & Interpretation Documentation & Alignment STEP 1 Measurement Assessment STEP 2 Recommendations Report STEP 3 Take Action Input is a combination of primary data (interviews and discussions) and secondary data (existing performance documentation) Interactive Q&A session Opportunities & benchmark analysis Solution recommendations Quick wins prioritization Identify goals & objectives Develop scope of work Develop project timeline and deliverables Full or partial project team participation Interviews (phone or in-person)

19 About Darby Consulting North American Management Consulting Firm

20 About Darby Consulting Helping to improve project performance Quick Facts: Headquarters in Houston, TX Serve clients throughout North America Specialize in PMO Consulting, Project Support and Change Readiness Provide people, processes and technology to efficiently support complex projects Consultants with minimum 10 year s experience

21 Our roots are grounded in program, project and change management PMO Setup PMO Maturity PMO CONSULTING PMO Strategy & Business Alignment Project Performance Audits & Advisory Metrics & Reporting epmo Technology Planning PROJECT SUPPORT Valuation & Economic Analysis Cost Management Schedule Management Risk Management Quality Management Supplier Management Stakeholder & Change Management CHANGE READINESS Impact & culture assessment Change strategy & planning Stakeholder communications Organization design Business process alignment Skills assessment & training Change measurement Operational Readiness

22 Contact Us Darby Consulting - North American Offices Houston, TX (Headquarters) 800 Town and Country Blvd, Suite 300 Houston, TX Washington, DC 100 M Street, S.E., Suite 600 Washington, DC San Ramon, CA Bishop Ranch Camino Ramon, Suite 200 San Ramon, CA Shelia Darby PMO Consulting & Project Support Practices Managing Director office: (832)

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